Employers are continuously challenged to maximize profits and increase profitability as employer costs, such as health care costs, continue to rise. Especially with the seemingly endless rise in health care costs, employers are desperately searching for ways to cut costs associated with group health care plans and retirement plans (collectively, “Plans”). The employer's selection of its Plans usually seeks to obtain satisfactory insurance and retirement options and plans for its employees at a cost the employer can afford and is able, and willing, to pay. Accordingly, with some consideration to a plan's options, including co-pays, deductibles, caps, coverage limits, investment options, forecasted investment performance, etc., employers most commonly select Plans based on the lowest quoted cost for a selected “level” of coverage and options. Once a Plan is selected, while an employer may be satisfied to have made the decision knowing the impact of the accompanying costs on employer's bottom line profits, the flaws with the analysis and selection process are completely overlooked.
Although there are a variety of existing tools to assist employers and employees to analyze various employee benefit financial situations, these are all limited in nature, do not integrate with each other, fail to consider critical criteria and therefore offer only a glimpse of the overall problem. They provide only a partial solution at best to all parties involved. Existing technologies do not consider, analyze, or calculate the present value of the future cost to the employer for an aging workforce that is unable to retire at a predetermined target age due to insufficient finances. Existing technologies do not seek to reduce the employer's costs for its employees by increasing the likelihood that the employee can retire at a predetermined target age. For instance, retirement planning companies typically make available, at an employee level, a computer program to assist in calculating the contribution level necessary to meet certain retirement income goals. Although this is of some help, it does not provide a complete financial picture for the employee. The complete analysis needs to also address a plethora of other considerations such as healthcare protection, debt management, tax efficiency, other risks such as disability and death, proper investment strategies, to mention only a few. But most significantly, these tools fail to integrate in any way with the concurrent needs of the employer, relative to cost and financial viability and how the employee and employer needs can be properly aligned to bring a mutually successful solution.
Conversely employers can independently calculate the costs of employee benefits such as healthcare and retirement plans separately utilizing spreadsheet programs or based upon reports from their providers for these services. However, again these are not integrated with the employee's needs and, more importantly, they do not identify the future financial impact of the selected current healthcare and retirement plans. The analysis fails to forecast or consider the consequences of the selection. The analysis fails to forecast or consider the impact on the employer arising from a financially unhealthy and/or aging workforce that is unable to retire, such as, increased healthcare claims and cost, higher healthcare and workers compensation premiums, and decreased annual productivity. Existing tools do not determine the cost variance on an employee age and retirement readiness related basis for the employer. So while the employer knows his total costs for the plans and services, the employer lacks a quantitative analysis on the impact of an aging workforce caused by a lack of retirement readiness and also lacks the detailed components costs of the total integrated view of expense. No prescriptive solutions are provided on how to best proceed in the future to mitigate the age related higher employee costs, to lower the corporate costs of the benefits, and at the same time improve the financial wellness of employees.
Existing technologies in this area are generally single benefit plan focused, on either employer or employee, without addressing the continuum of considerations necessary to bring about effective solutions for both the employer and employee. There is no related art providing a properly aligned analysis and prescriptive solution for both employee and employer.
There is a need for a new and better process and method to select Plans. There is a need for a process, method and system that considers the impact on the employer arising from an aging workforce unable to retire, such as increased healthcare claims and cost, higher healthcare and workers compensation premiums, decreased annual productivity, etc., and helps select a plan that reduces the impact. There is a need for a process, method and system that determines the cost variance on an employee age and retirement readiness related basis and quantitatively analyses the impact of an aging workforce caused by a lack of retirement readiness. There is a need for a process, method and system that determines the employer's future costs for Plans for a workforce (using predetermined parameters) and calculates/quantifies the differences (savings) in those future costs by increasing the retirement readiness of the workforce through Plan selections. There is a need for a process, method and system that reduces an employer's future costs for Plans based on the analysis of the long term reduced cost for the Plans arising from the selection of plans causing an increase in the workforce's ability to retire at a predetermined target age.